Springfield Properties roar back to profit

The Elgin-based housebuilder said pre-tax profits jumped to a 'record' £5.1m against a pre-tax loss of £476,000 the prior year when it booked £3.56m in exceptional items (2016: nil) for “incorrect estimates made in previous years”

Springfield Properties has jumped back to profit as group revenues rose almost eight per cent to £90.7 million in the 2016 year to May.

The Elgin-based housebuilder said pre-tax profits jumped to a "record" £5.1m against a pre-tax loss of £476,000 the prior year when it booked £3.56m in exceptional items (2016: nil) for “incorrect estimates made in previous years”.

On an underlying basis – stripping out the effects of last years exceptional charge - pre-tax profits were up 65 per cent on the underlying £3,09 million profit reported for 2015.

Springfield said in a statement, house sales in the 2016 year rose four per cent to 495 units (2015: 478 units).

On an operating level, Springfield said profits jumped to £6.1 million from the reported £212,441 last year and were up almost 65 per cent on an underlying basis (2015: £3.78 million).

Springfield state in audited accounts it currently has planning consent for 1,700 homes across 13 sites and is “actively procuring land and establishing relationships with various housing associations and councils to address the Scottish Government need for social housing”.

The group notes it is in the process of creating new villages in Dundee, Perth and Elgin.

Springfield said banking facilities were “agreed to our satisfaction” in the year, with the overall facility having increased by £10 million to £27.5 million while the overdraft was reduced to £425,383 from £1.33 million last year.

The bank loan is a revolving credit facility repayable by 2018 and secured over the company's properties, priced at 2.5 per cent per annum above the Bank of England base rate.

Director loans were broadly flat at £2 million and are unsecured and and pay interest at 4.5 per cent above the Bank of England base rate.

The company paid a £2.13 million dividend in the 2016 year (2015: nil), including £1.55 million in dividend payments to “key management personnel”.

The group notes 1,960 ordinary shares were allotted during the year for a consideration of £1.09 million.

Springfield Properties employed 449 people on average in the 2016 year to May.

Managing director Innes Smith said: “Our success this year bodes well for future profit growth which will be sustained with more new sites coming out of planning and into production.

“Next year we will begin building on a 3,500 home village in Perth, a 750 home development in Dundee and a 2,000 home village in Elgin.

“We are progressing planning for a 2,500 home village near Stirling and a further 800 home development at the Wisp, Edinburgh.

“Springfield has reported a profit and growth in every year of trading.

“This will continue next year, with turnover rising to £100m as increasing success drives the business forward.

“We are delighted to have recently secured a two-year funding package from our bank to deliver these opportunities.”